ZipRecruiter 2025 Q2 Earnings Sharp Earnings Drop Amid Revenue Slowdown

ZipRecruiter (ZIP) reported its fiscal 2025 Q2 earnings on August 11, 2025, delivering a mixed financial performance amid challenging labor market conditions. The company fell well short of earnings expectations, swinging to a loss, while revenue declined year-over-year. Guidance for the third quarter indicates cautious optimism, with the company forecasting modest sequential revenue growth for the first time since 2021.

Revenue
Total revenue for Q2 2025 came in at $112.23 million, reflecting a 9.2% year-over-year decline from $123.66 million in the prior-year period. Subscription revenue remained the company’s largest revenue source, contributing $87.80 million, while performance-based revenue accounted for $24.43 million. Despite the overall downturn, the company noted stabilization in revenue, with a 2% sequential increase in Q2 and continued sequential growth in the number of paid employers for the third consecutive quarter.

Earnings/Net Income
ZipRecruiter swung to a net loss of $9.51 million in Q2 2025, representing a net loss of $0.10 per share. This marked a dramatic shift from a net income of $7.01 million, or $0.07 per share, in Q2 2024. The 235.5% deterioration in net income underscores the company’s current financial strain. This significant decline in profitability is a key concern for investors.

Price Action
The stock has experienced a sharp sell-off in the wake of the earnings report, tumbling 13.00% in a single trading day, 11.00% over the past week, and 33.21% month-to-date. The negative price action reflects investor disappointment with the earnings and revenue figures.

Post-Earnings Price Action Review
Despite the recent decline, historical data suggests a favorable post-earnings strategy for ZipRecruiter. Over the past three years, buying shares on quarters where revenue increased quarter-over-quarter and holding for 30 days yielded a cumulative return of 17.5%, translating to an average annual return of 5.8%. This suggests a potentially viable medium-term investment approach, albeit with current market conditions dampening near-term sentiment.

CEO Commentary
CEO Ian H. Siegel expressed cautious optimism about the company’s trajectory, emphasizing early momentum in a soft labor market. He highlighted sequential growth in quarterly paid employers and the stabilization of revenue, while expressing confidence in modest year-over-year growth in Q4. Siegel also emphasized the company’s commitment to product innovation, including AI-powered tools like ZipIntro and Breakroom, which are driving engagement and adoption. He stressed the importance of disciplined capital use and capturing market share as the labor market recovers.

Guidance
ZipRecruiter guided for Q3 2025 revenue in the range of $110 million to $116 million, with a midpoint of $113 million, representing a 1% sequential increase. This would mark the first Q2-to-Q3 revenue growth since 2021. The company also expects Q3 adjusted EBITDA to reach $6 million at the midpoint, or a 5% margin. Looking ahead, ZipRecruiter anticipates modest year-over-year revenue growth in Q4 and full-year adjusted EBITDA margins in the mid-single digits, with a focus on disciplined capital deployment and high ROI marketing.

Additional News
Recent Nigerian media highlighted a range of non-financial developments. Nigerian authorities intercepted arms and expired drugs valued at N10 billion, signaling heightened security concerns. In political news, the Federal Government initiated the recruitment of permanent secretaries for new ministries, while the Nigerian National Petroleum Corporation (NNPC) faced criticism over the stalled rehabilitation of refineries. Additionally, the Federal Government generated N5.21 trillion from oil sales in the first half of 2025, underlining the sector’s continued dominance in the economy.